WILLS AND TRUSTS
Gerry W. Beyer*
TABLE OF CONTENTS
I. INTESTA CY .............................................
II. W IL LS ....................................................
A. TESTAMENTARY INTENT ...............................
B.
INTERPRETATION AND CONSTRUCTION ................
C. PRETERMIT-rED CHILDREN ............................
D . CONTESTS .............................................
1. Standing...........................................
2. Undue Influence ...................................
III. ESTATE ADMINISTRATION ...........................
A . JURISDICTION .........................................
1. District Court .....................................
2. Transfer ...........................................
B . A PPEA L ...............................................
598
598
598
599
601
603
603
604
605
605
605
605
606
C. STATUTE OF LIMITATIONS .............................
607
D . LOST WILL ............................................
E. LATE PROBATE .......................................
F. INDEPENDENT ADMINISTRATION .......................
1. Unsuitability of Named Executor ..................
2. Removal of Independent Executor .................
608
G.
608
609
609
609
RECOVERY FOR UNAUTHORIZED BANK
TRANSACTIONS ........................................
610
H . CONTEMPT ............................................
I. ATTORNEY AD LITEM COSTS ..........................
611
IV . TR U STS ..................................................
A . JURISDICTION .........................................
B. REMOVAL OF TRUSTEE ................................
C. SUCCESSOR TRUSTEE ..................................
D. CRIMINAL LIABILITY ..................................
V. CONCLUSION ...........................................
612
613
614
614
612
612
614
HIS article discusses judicial developments in Texas related to the
law of intestacy, wills, estate administration, trusts, and other estate planning matters. The reader is warned that not all newly de*Governor
Preston E. Smith Regents Professor of Law, Texas Tech University
School of Law. B.A., Eastern Michigan University; J.D., Ohio State University; LL.M. &
J.S.D., University of Illinois. The author gratefully acknowledges the excellent assistance
of Kerri Griffin, J.D., Texas Tech University School of Law, in the preparation of this
article.
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cided cases during the Survey period are presented and not all aspects of
each cited case are analyzed. You must read and study the full text of
each opinion before relying on it or using it as precedent. The discussion
of most cases includes the moral, that is, the important lesson to be
learned from the case. By recognizing situations that have resulted in
time-consuming and costly litigation, the reader may be able to reduce
the likelihood of the same situations arising with his or her clients.
I.
INTESTACY
The Texas Supreme Court in Frost National Bank v. Fernandez, held
that the discovery rule is not applicable to heirship claims by non-marital
children.1 In Frost, an alleged heir brought suit to be declared an heir of
the testator who had died over forty years earlier. The testator's will left
his entire estate to his wife and the estate was closed in 1952. The alleged
heir hoped that by setting aside a 1949 judgment which determined that
none of the testator's estate passed by intestacy, she could claim an intestate share of this property. The alleged heir's excuse for not bringing the
action in a timely manner, that is, within the four-year residual limitations
period, 2 was that she was unaware of her possible status as an heir until
recently.
The Texas Supreme Court held that the discovery rule does not apply
to inheritance or heirship claims by non-marital children or to bill of review claims to set aside previous probate judgments.3 This holding is con-4
sistent with the Texas Supreme Court's 1997 decision in Little v. Smith,
which rejected the discovery rule for heirship claims by adoptees. As in
Little, the supreme court determined that the "strong public interest in
according finality to probate proceedings" prevailed over the possible
claim of a potential heir. 5 Accordingly, a person with questionable parentage interested in making inheritance claims must determine the identity of his or her parents in a timely manner and then monitor the parent
so he or she may bring a timely claim after the parent dies.
II.
A.
WILLS
TESTAMENTARY INTENT
Two recent cases serve as warnings to non-attorneys and attorneys
alike of the importance of making sure a will clearly reflects the testator's
intent to create an at-death disposition of property. First, in In re Estate
of Hendler,6 the Dallas Court of Appeals addressed a situation where the
testator wrote a statement on the bottom of the last page of his valid
1. 315 S.W.3d 494, 512 (Tex. 2010).
2. Id. at 509 (citing TEX. CIv. PRAC. & REM. CODE ANN. § 16.051 (West 1985)).
3. Id. at 511.
4. 943 S.W.2d 414, 420 (Tex. 1997).
5. Frost Nat'l Bank, 315 S.W.3d at 511 (quoting Little v. Smith, 943 S.W.2d 414, 421
(Tex. 1997) (internal quotations omitted)).
6. 316 S.W.3d 703 (Tex. App.-Dallas 2010, no pet.).
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attested will indicating he was divorced and that his prior will still existed.
The trial court granted summary judgment that this holographic material
7
was a valid codicil and acted to republish the will.
8
The court of appeals reversed, determining there were still fact issues
of whether the testator had testamentary intent when he placed the handwritten statement on the bottom of his attested will.9 Thus summary
judgment was improper. The court explained that the testator's words
could be interpreted in two ways: (1) as a mere recitation of facts that he
was divorced and had not revoked his will, or (2) as a statement that he
reviewed his prior will with his divorces in mind and his prior will still
stated his property disposition desires. 10 Because both interpretations
were reasonable, the trial court erred in issuing a summary judgment."
Second, in In re Estate of Allen, 12 a son probated his mother's will as a
muniment of title and convinced the trial court to admit thirteen writings
as codicils to his mother's will. His siblings appealed, asserting that these
writings were not valid codicils because they did not demonstrate that
their mother had testamentary intent.
The Tyler Court of Appeals reversed, agreeing with the siblings that
these writings lacked testamentary intent.' 3 The writings contained extensive lists of personal property with indications that these "statements"
of property were "for" the son. Their mother signed the writings and two
individuals witnessed them. However, they were not labeled as "wills" or
"codicils" and lacked any language showing the mother's intent for these
writings to dispose of property upon her death. The court explained that
merely indicating in a "statement" that property is "for" someone does
14
not show an intent to make an at-death property disposition.
B.
INTERPRETATION AND CONSTRUCTION
The courts of appeals in Texas were busy during the Survey period
resolving interpretation and construction issues often caused by poor will
drafting. The Fort Worth Court of Appeals in In re Estate of Florence15
notably held that the statute of limitations for interpretation actions begins to run when parties advocate conflicting interpretations, not when
the testator's will is admitted to probate. In this case, the testator's will
gave his wife, among other things, his "tangible property." The residuary
of the estate passed into a testamentary trust. The wife's death over
twenty years later raised an issue as to whether real property was included within the term "tangible property," thus passing part of the wife's
7. Id. at 706-07.
8. Id. at 714.
9.
10.
11.
12.
13.
14.
15.
Id. at 708-09.
Id. at 708.
Id.
301 S.W.3d 923 (Tex. App.-Tyler 2009, pet. denied).
Id. at 929.
Id.
307 S.W.3d 887, 893 (Tex. App.-Fort Worth 2010, no pet.).
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estate to her under the testator's will, or whether this real property
passed through the testamentary trust.
The court of appeals focused not on the merits of the claim but rather
on whether the statute of limitations had run on the interpretation action
brought by the beneficiaries of the wife's will. 1 6 Both sides agreed that
the residuary four-year statute of limitations applied but disagreed as to
when the time began to run. The court rejected the argument that the
statute of limitations began to run from the date the testator's will was
admitted to probate. 17 Instead, the court determined that the statute did
property"
not run until one of the parties claimed that the term "tangible
18
included both tangible personal property and real property.
In re Estate of Catlin'9 involved an oddly-worded will in which the residuary of the testator's estate passed into a testamentary trust for the
benefit of a beneficiary who predeceased the testator and whose death
caused the trust to terminate. A debate arose regarding whether the residuary estate passed to the remainder beneficiaries of the testamentary
trust or via intestacy. Both the trial and appellate court determined that
the residuary passed to the remainder beneficiaries of the trust even
20
though the trust was both created and terminated at the same moment.
The Amarillo Court of Appeals was unwilling to adopt a different interpretation because to do so would render terms of the will meaningless,
circumvent the testator's intent-as reflected in the will-to give his son
and cause 90% of the testator's estate to
only a small part of the estate,
21
pass by intestacy to this son.
Testator's holographic will in the Beaumont Court of Appeals case of
In re Estate of Craigen provided for his wife to "get[ ] everything till she
dies," but later in the will he left his wife "all [ ] real & personal property."'2 2 Both the trial court and court of appeals determined that the will
was ambiguous. 23 Although there was no extrinsic evidence of the testa-
tor's intent, the courts applied standard interpretation rules to conclude
that the testator intended to leave his wife all his property outright, and
24
not just a life estate.
The court based its conclusion on a variety of factors including that: (1)
the will was drafted by a lay individual and thus terms are given their
popular rather than technical meaning, so that "till she dies" does not
create a life estate but merely states the obvious-that a person may only
use property while alive, (2) if the will granted his wife a life estate, the
remainder would pass via intestacy and wills are interpreted to avoid in16. Id.
17. Id. at 891.
18. Id. at 893.
19. 311 S.W.3d 697 (Tex. App.-Amarillo 2010, pet. denied).
20. Id. at 702.
21. Id.
22. Id.
23. Id.
24. Id. at 828-29.
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testacy, (3) Texas law favors the early vesting of interests, and (4) the will
was ambiguous because the Testator referred to his wife by two different
25
first names.
The last interpretation case is In re Estate of Slaughter,26 decided by the
Texarkana Court of Appeals. In this case, the testator died in 1965 and
his 1955 holographic will was duly admitted to probate. A dispute arose
whether this will either (1) devised all his mineral rights to his three sons
to be held as tenants in common or (2) devised only the royalty rights to
his three sons as tenants in common with the remainder of the mineral
estate passing to the sons in equal but divided interests. The trial court
determined that the will was patently ambiguous and determined that the
to his sons as tenants in
testator meant to devise all mineral interests
28
common. 27 The court of appeals reversed.
The court of appeals began by examining the testator's will that devised
to
each son 158 acres of land and also provided that the three sons were '29
"share and share alike production royalty and unproduction royalty."
The court explained that the testator's language was unambiguous in that
it transferred 158 acres to each son and reserved the royalty interest from
the entire tract to be held by the sons as tenants in common, each owning
an undivided one-third of the royalty interest.30 The court recognized
that the term "unproduction royalty" was an "unusual expression," but
was nonetheless unambiguous, meaning "to cease production or not to
produce oil and gas," or what is commonly known as, shut-in royalty
(royalties paid to keep the lease in force when a well capable of producing oil and gas is not utilized because there is no market for the oil and
3
gas). 1
C.
PRETERMITrED CHILDREN
A parent has no obligation to provide a testamentary gift for his or her
child, even if the child is a minor. 32 Thus, a parent may disinherit one or
more children. However, to protect a child from an accidental or inadvertent disinheritance, Texas law provides a forced share of the parent's
estate for certain children who are born or adopted after the parent executed his or her will. 33 Two cases decided during the Survey period shed
light on the situations where a child may or may not be successful in obtaining this forced share.
25. Id. at 827-29. Surprisingly, the court did not mention the construction rule that if
two provisions of a wilt conflict, the latter provision controls. See, e.g., Martin v. Dial, 57
S.W.2d 75, 79 (Tex. Comm'n App. 1933).
26. 305 S.W.3d 804 (Tex. App.-Texarkana 2010, no pet.).
27.
28.
29.
30.
Id. at
Id. at
Id. at
Id. at
806.
812.
807-08.
810.
31. Id. at 811-12.
32. See TEX. PROB.
33. Id.
CODE ANN. § 67
(West Supp. 2010).
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In Bailey v. Warren,34 the testator's valid will left his entire estate to his
wife, but if she did not survive him to his heirs-at-law. The testator had
two non-marital children who claimed they were entitled to his estate as
pretermitted children. Son One claimed that although he was born
twelve years before the testator executed the will, he was nonetheless
pretermitted because the testator was not adjudicated as his father until
one year after he executed his will. Son Two claimed he was pretermitted
because he was born after the testator executed the will and was not provided for, even though the contingent beneficiary was the testator's "heirat-law." The trial court granted summary judgment in favor of both
35
children.
The Tyler Court of Appeals reversed. 36 With regard to Son One, the
court rejected the argument that he was "constructively born" after will
execution because the testator was not adjudicated as his father until after he executed his will. 37 Instead, once an adjudication of paternity occurs, Son One is treated as being the testator's child from birth, which
38
was twelve years prior to will execution.
The court began its analysis of Son Two's case by recognizing that Son
Two was a pretermitted child because he was born many years after the
testator executed his will. 39 However, Son Two was mentioned or otherwise provided for in the testator's will and was thus not entitled to a
pretermitted child's share.40 The contingent class gift to the testator's
"heirs-at-law" encompassed Son Two as Son Two would have been one of
the testator's heirs had the testator's wife not survived. 4 1 The court also
explained that even if Son Two was not included in this class gift, he
would still not be entitled to share in the testator's estate because he
would be limited to sharing in the contingent gift to Son One as an heir at
law. 42 Because the testator's wife survived, Son One received nothing,
and thus Son Two would receive nothing as well. 43
In In re Estate of Hendler,44 the testator executed a valid will in 1990
leaving his entire estate to his brother. Thereafter, the testator had two
children. In 1999, he signed a holographic statement on the last page of
his will indicating that his prior will still existed. After the testator's
death, his two children claimed that they were pretermitted and thus each
entitled to half of the testator's estate. The trial court granted summary
judgment rejecting the children's claim, holding that the codicil acted to
republish the will and that the children could thus not be treated as born
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
319 S.W.3d 185 (Tex. App.-Tyler 2010, pet. denied).
Id. at 188.
Id. at 187.
Id. at 191.
Id.
Id. at 191.
Id. at 194.
Id.
Id. at 194-95.
Id. at 195.
316 S.W.3d 703 (Tex. App.-Dallas 2010, no pet.).
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after the date the testator executed the will. 45 In addition, the trial court
found that even if the children were pretermitted, they were otherwise
provided for and thus precluded from sharing in the estate.46
The Dallas Court of Appeals found the summary grant of judgment
improper 47 because it was possible that the children were pretermitted
depending on the outcome of a trial on the issue of the validity of the
holographic statement as a codicil. 48 The court then evaluated whether
one or both children were "otherwise provided for" so they could not
49
take even if they were determined to be pretermitted, and examined 50
three possible ways in which the testator provided for his children.
First, the testator paid social security taxes, which allowed his children to
receive death benefits. 5 1 Rejecting the reasoning of the 1999 San
Antonio Court of Appeals case Estate of Gorski v. Welch, 52 the court
held that the testator did not voluntarily supply the social security death
benefits because they are a product of federal law that mandates the pay53
ment of social security taxes.
Second, the court rejected the argument that the testator's court-ordered child support obligations were sufficient to demonstrate that he
provided for his children. 54 The support order was rendered by default
and the obligation ended upon the testator's death, unlike the order in
Gorski, which was entered by consent and continued after the testator's
55
death.
Third, the court agreed that one of the sons was otherwise provided for
because the testator named him as a contingent beneficiary on one of his
life insurance policies. 56 The court rejected his argument that a contingent disposition is insufficient because the '57
Probate Code states that the
disposition may be "vested or contingent.
D.
1.
CONTESTS
Standing
In re Estate of Redus 58 reminds practitioners that the requirements to
establish standing to contest a will or probate a will are significantly less
than the requirements to contest a will successfully or to have the will
admitted to probate. Proponent One sought to probate the testator's
45. Id. at 706-07.
46. Id. at 707.
47. Id. at 708.
48.
49.
50.
51.
Id.
Id. at 711.
Id. at 712-14.
Id. at 712.
52. 993 S.W.2d 298 (Tex. App.-San Antonio 1999, pet. denied).
53. Hendler, 316 S.W.3d at 712-13.
54. Id. at 714.
55. Id. at 713-14.
56. Id. at 714.
57. Id. (quoting TEx. PROB. CODE ANN. § 67(d) (West 2003)).
58. 321 S.W.3d 160 (Tex. App.-Eastland 2010, no pet.).
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2007 will, which named Proponent One as the sole beneficiary. Proponent Two claimed that the 2007 will was invalid and sought to probate the
testator's 2005 will, which named Proponent Two as a primary beneficiary. The trial court determined that Proponent Two lacked standing and
59
dismissed Proponent Two's action.
The Eastland Court of Appeals reversed. 60 The court began its analysis by looking at Probate Code section 10, which requires that "a person
must have an interest in an estate to have standing. '61 The court then
turned to the Probate Code's definition of "interested person. ' 62 Even
Proponent One agreed that a beneficiary of a prior will has standing.
However, Proponent One asserted that Proponent Two failed to introduce important evidence at the in-limine hearing, (such as the 2005 will
itself), proof of the elements necessary to probate a missing will, and evidence to overcome the presumption of revocation that arises when the
original cannot be produced. The court of appeals explained that Proponent One was "commingling the issues decided in an in-limine hearing
with those decided at trial" on the merits. 63 To establish standing, it was
sufficient for Proponent Two to testify that he was a beneficiary of the
testator's 2005 will, file a copy of the will, and present other evidence of
the will's existence and his status as a beneficiary (e.g., testimony from
65
the drafting attorney). 64 Accordingly, Proponent Two had standing.
2.
Undue Influence
In re Estate of Russell 66 demonstrates that a jury finding of undue influence is very difficult to overturn on appeal, even if the facts supporting
the finding are weak. In this case the testatrix's will was successfully contested by her granddaughters who claimed the testatrix was subject to
undue influence when she executed her will. The El Paso Court of Appeals affirmed, finding it sufficient evidence to prove the elements of un67
due influence.
The court of appeals made a summary review of the evidence, focusing
on one child's involvement with his mother's execution of a will disinher68
iting her granddaughters contrary to the provisions of her prior wills.
Despite the testatrix having testamentary capacity, the court determined
that because she made an unexpected, unnatural disposition of her property by removing her grandchildren as beneficiaries, the jury could only
conclude that this feat was accomplished through the son's exercise of
59. Id. at 161-62.
60. Id. at 161.
61. Id. at 162 (citing
TEX. PROB. CODE ANN.
§ 10 (West 2003)).
62. Id. (citing TEX. PROB. CODE ANN. § 3(r)).
63. Id.
64. Id. at 163.
65.
66.
67.
68.
Id. at 164.
311 S.W.3d 528 (Tex. App.-El Paso 2009, no pet.).
Id. at 536.
Id. at 531-34.
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undue influence. 69
III.
ESTATE ADMINISTRATION
A.
JURISDICTION
1. District Court
In Frost National Bank v. Fernandez,70 an alleged heir brought suit in
both district court and statutory probate court in an attempt to be declared an heir of the testator who died over 40 years earlier and whose
estate was closed in 1952. She hoped that by setting aside a 1949 judgment wherein none of the testator's estate passed by intestacy, she could
claim an intestate share of this property. The district court granted summary judgment against the alleged heir. On appeal, the Corpus Christi
Court of Appeals held that due to the district court's lack of subject matter jurisdiction, it must abate the proceedings until the probate court re71
solved the heirship issue.
The Texas Supreme Court reversed. 72 The supreme court held that the
alleged heir's "direct attack on a previous judgment vested the district
court with subject matter jurisdiction. '73 The district court was entitled
to take her heirship allegation as true, which then would be sufficient to
give her standing. 74 The supreme court explained that standing existed
"regardless of whether the alleged relationship was true or subject to re75
buttal on the merits."
The Texas Supreme Court also held that Probate Code section 48(a)
"does not authorize a probate court to exercise jurisdiction over heirship
claims when an estate has been closed for decades and the decedent did
76
not die intestate."
2.
Transfer
Fernandez v. Bustamante77 demonstrates that failure of a personal representative to qualify (take the oath, post the bond, or both) does not
deprive a court of jurisdiction over the administration teaches. Here, Applicant One filed an application for appointment as a temporary administrator in County One and although granted, Applicant One never
qualified because she failed to post bond. Applicant Two then filed an
69. Id. at 534. The court of appeals also determined that the son tortiously interfered
with the granddaughters' inheritance rights and; further, that the trial court appropriately
awarded costs against the son despite failing to prove good faith with sufficient cause because the grandchildren were not seeking their attorney fees under Probate Code § 243.
Id. at 535-36.
70. 315 S.W.3d 494 (Tex. 2010).
71. Id. at 497.
72. Id.
73. Id.
74. Id. at 503.
75. Id. at 503-04.
76. Id. at 497.
77. 305 S.W.3d 333 (Tex. App.-Houston [14th Dist.] 2010, no pet.).
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application in County Two. The Houston Fourteenth Court of Appeals
determined that County One had jurisdiction to transfer venue to County
Two.78 The court explained that the probate court in County One obtained jurisdiction when the administration was opened even though Applicant One did not post the required bond. 79 The Probate Code
provides that when venue is proper in more than one court, the court
where the application is first filed has jurisdiction to the exclusion of
other courts.8 0 A probate proceeding does not terminate merely because
the bond was not paid.81 Instead, the court has jurisdiction until the ad82
ministration is closed.
B.
APPEAL
The courts of appeal often have to determine whether a trial court's
judgment is final and appealable or merely interlocutory. In doing so,
they apply the test set forth in Crowson v. Wakeham.83 This test provides
that if the Probate Code does not state that a judgment is final and appealable, then the judgment is interlocutory "if there is a proceeding of
which the order in question may logically be considered a part, but one or
more pleadings also part of that proceeding raise issues or parties not
disposed of."8 4a Three cases concerning this test were decided during the
Survey period.
In Fernandez v. Bustamante,8 5 the Houston Fourteenth Court of Appeals faced the issue of whether a venue determination in a probate proceeding is appealable. The court found that the Probate code contained
no statute on point8 6 and thus applied the Crowson standard.8 7 The court
then pointed to Texas Civil Practice & Remedies Code section 15.064(a)
and rule 87 of the Texas Rules of Civil Procedure which provide that a
venue determination in general "is not a final judgment that is ripe for
appeal. 88s The court found no reason to deviate from the general rule
that venue determinations are interlocutory. 89 Accordingly, the court
dismissed the appeal for want of jurisdiction. 90
In Pollardv. Pollard,a husband obtained an order from the trial court
to require his wife's independent executor to account under Probate
Code section 149A.91 The executor appealed, arguing that the husband
78. Id. at 339.
79.
80.
81.
82.
83.
84.
85.
86.
87.
88.
89.
90.
91.
Id. at 341-42.
Id. at 340 (citing TEX. PROB. CODE ANN. § 8(a) (West 2003)).
Id. at 341.
Id.
897 S.W.2d 779 (Tex. 1995).
Id. at 783.
305 S.W.3d 333 (Tex. App.-Houston [14th Dist.] 2010, no pet.).
Id. at 339.
Id. at 337-38; see Crowson v. Wakeham, 897 S.W.2d 779, 783 (Tex. 1995).
Bustamante, 305 S.W.3d at 338.
Id. at 339.
Id.
316 S.W.3d 238 (Tex. App.-Dallas 2010, no pet.).
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was not an interested person and lacked standing to request an accounting because his wife had successfully divorced him prior to her death.
The Dallas Court of Appeals dismissed the appeal for lack of jurisdiction 92 explaining that an order to account is interlocutory and not appealable for two reasons: (1) "No statute declares an order for an accounting
than
to be final," and (2) the order "is not part of any proceeding other
' '93
the overall independent administration of the [wife's] [e]state.
In Rawlins v. Weaver, the trial court granted an executor's order to sell
specified real property of the estate. 94 The Dallas Court of Appeals held
that it lacked jurisdiction to hear the95appeal because the order was interlocutory and hence non-appealable.
C.
STATUTE OF LIMITATIONS
A person dissatisfied with a determination of heirship should timely
appeal or file a bill of review. Failure to do so may result in losing an
otherwise viable claim as so happened in In re Estate of Rogers.96 The
trial court found that the decedent died intestate, determined heirs, and
appointed independent administrators in 2006. In 2009, the decedent's
friends attempted to set aside these orders and probate the decedent's
will. The independent administrators claimed that it was too late to challenge the orders as more than two years had passed from the date of
judgment. Both the time to appeal and file a bill of review under Probate
Code section 31 had elapsed. 97 The friends claimed, however, that they
were within the four year period to probate a will under Probate Code
section 73.98 The trial court granted summary judgment in favor of the
independent administrators, and the El Paso Court of Appeals affirmed. 99 The court recognized that normally a will proponent has four
years from the date of the testator's death to probate the will. 100 However, Probate Code section 73 does not address the situation where the
court has already entered a final judgment affirming decedent's intestacy. 10 1 The friends had the option to either appeal the trial court's judgment or file a bill of review. 10 2 Because they did neither in a timely
10 3
manner, they were barred from setting aside the judgment.
92.
93.
94.
95.
96.
97.
98.
99.
100.
101.
102.
103.
Id. at 239.
Id. at 240.
317 S.W.3d 512 (Tex. App.-Dallas 2010, no pet.).
Id. at 514.
322 S.W.3d 361 (Tex. App.-E1 Paso 2010, no pet.).
TEX. PROB. CODE ANN. § 31 (West 2003).
Id. § 73.
Rogers, 322 S.W.3d at 362-63.
Id. at 363.
Id.
Id.
Id. at 364.
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LOST WILL
The trial court in In re Estate of Catlin10 4 admitted a lost will to probate
under Probate Code section 85.105 The Amarillo Court of Appeals affirmed, rejecting the contestant's assertion that there was insufficient evidence to establish why the original could not be produced. Thus, the
contestant failed to rebut the presumption of revocation that arises when
the original will is not available for probate.10 6 In an almost unbelievable
opinion, the court accepted the proponent's explanation that he looked in
the testator's home, office, safety deposit boxes, and drafting attorney's
office, but could not find the original. 10 7 The court explained that the
proponent did not have to demonstrate an affirmative reason why the
original could not be located such as "the eating habits of a neighbor's
goat, the occurrence of a Kansas tornado, the devastation of a flash flood,
or the like."108
This opinion is remarkable and shocking. The reasoning of the court of
appeals makes it impossible for a testator to revoke a will by physical act
because even if the will cannot be found and there is no affirmative reason why it cannot be found, a copy may nonetheless be probated. Accordingly, prudent practice is to revoke a will by subsequent writing and
endeavor to ensure that the new writing is found after death.
E.
LATE PROBATE
Both the trial court and the Tyler Court of Appeals agreed that the
proponent in In re Estate of Rothrock 0 9 was in default for failing to probate the testator's will within four years of death, and thus the will could
not be admitted to probate. The proponent, a non-Texas lawyer, knew
about the testator's will from the time of the testator's death. Although
he was the sole beneficiary of the will to the exclusion of his five siblings,
he did not probate the will believing there was insufficient property to
warrant doing so.
Thirteen years later when it turned out that the testator died owning
valuable mineral interests, the proponent attempted to probate the will.
The court of appeals held that it was too late and that the proponent and
his siblings' agreement not to probate the testator's will was not a sufficient excuse. 110 The proponent made the decision not to probate the will.
The fact that the decision was wrong is not a sufficient excuse for delaying
beyond the four-year period.1 1 '
104. 311 S.W.3d 697 (Tex. App.-Amarillo 2010, pet. denied).
105. TEX. PROB. CODE ANN. § 85 (West Supp. 2010).
106. In re Estate of Catlin, 311 S.W.3d at 699, 703.
107. Id. at 700.
108. Id. at 701.
109. 312 S.W.3d 271, 275 (Tex. App.-Tyler 2010, no pet.).
110. Id. at 274-75.
111. Id.
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F.
INDEPENDENT ADMINISTRATION
1. Unsuitability of Named Executor
A court will attempt to permit the named executor to serve because of
a long-standing tradition of permitting a testator to select his or her executor. This will be the case even if the named executor has "massaged"
the facts as in In re Estate of Gay.112 The Brothers asserted that they
were their deceased father's "personal representatives by testamentary
designation" to the Tenth Circuit Court of Appeals so they could substitute as a party to a lawsuit pending at the time of their father's death. In
reality, they had not been appointed by a court as their father's personal
representatives. When they later attempted to be appointed as their father's independent executors, the probate court determined that they
were "unsuitable"'1 13 because they misrepresented themselves before a
114
federal tribunal.
The Houston Fourteenth Court of Appeals held that the probate court
abused its discretion and "acted without reference to guiding rules and
principals by refusing to appoint [Brothers]." ' 1 5 The court looked closely
at what the Brothers actually told the Tenth Circuit. 1 6 They represented
that they were "named" as independent co-executors; a true statement.
They never claimed they were actually appointed. In addition, the Brothers' actions were designed to benefit their father's estate by defending an
appeal. The court also noted that the primary beneficiary of the will, the
decedent's wife (Brothers' mother), was in favor of their appointment,
having declined to serve as the independent executrix despite being first
117
named in the will.
2.
Removal of Independent Executor
Several aspects of an action to remove an independent executor from
office were analyzed in In re Estate of Hoelzer." 8 After his step-mother
died, Son was appointed as the successor independent executor of his father's estate. He then filed a claim against the father's estate on behalf of
himself and his three siblings for reimbursement of funds his step-mother
received as a result of asbestos litigation twenty years before. The probate court removed Son because the court had previously determined
that Son and his siblings were not creditors of their father's estate and
that any potential claims were time-barred. Thus, Son's actions constituted gross misconduct and gross mismanagement." 9
The Beaumont Court of Appeals affirmed, explaining that there was
112. 309 S.W.3d 676 (Tex. App.-Houston [14th Dist.] 2010, no pet.).
113. TEX. PROB. CODE ANN. § 78(c) (West 2003).
114.
115.
116.
117.
118.
In re Estate of Gay, 309 S.W.3d at 679.
Id. at 681.
Id. at 680.
Id.
310 S.W.3d 899 (Tex. App.-Beaumont 2010, pet. denied).
119. TEX. PROB. CODE ANN. § 149C (West 2010).
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It
sufficient evidence to show that Son's actions were inappropriate.
was only necessary for the trial court to determine that sufficient grounds
appeared to support the belief that Son misapplied or was about to121misIt
apply property of the estate, that is, to pay a judgment-barred claim.
is not necessary for the court to be absolutely certain that misapplication
has occurred or may occur in the future.122
Son also claimed that he was required to answer the complaint too
soon. Probate Code section 149C provides that the court may remove an
independent executor after the executor is cited by personal service to
answer at a time and place fixed in the notice. 123 This specific provision
governs over Texas Rule of Civil Procedure 245, which requires at least a
notice of forty-five days. 124 Thus, the Probate Court may require the executor to answer sooner than forty-five days. In addition, the court of
method satisappeals held that service on the executor's attorney by 2any
5
requirement.
executor
the
on
service
fies the personal
G.
RECOVERY FOR UNAUTHORIZED BANK TRANSACTIONS
In a case of first impression, the Texas Supreme Court addressed an
intriguing issue regarding the recovery of unauthorized bank transactions
that arose under a peculiar set of facts. 126 After the decedent's death in
2000, a fake administrator presented a bank with fraudulent letters of
administration. Over the next few months, he withdrew most of the decedent's funds from the account. In 2003, the court appointed a real administratrix. The real administratrix learned about the decedent's account at
the bank in February 2004, but did not contact the bank until June 2005
when she demanded the bank recredit the account for the funds the fake
administrator withdrew.
The bank refused, pointing to the one-year repose period to make
claims under Business and Commerce Code section 4.406, which was reduced to sixty days by contract. 127 The real administratrix, however,
claimed the period did not begin to run until the bank made the bank
statements available. The San Antonio Court of Appeals in Lenk v. Jefferson State Bank128 held that sending statements to the fake administrator and holding the statements at the bank's office were insufficient to
satisfy the bank's duty, and thus the real administratrix could recover.
The bank appealed.
129
The Texas Supreme Court reversed in Jefferson State Bank v. Lenk.
120.
121.
122.
123.
Hoelzer, 310 S.W.3d at 901.
Id. at 907.
Id.
TEX. PROB. CODE ANN. § 149C (West Supp. 2010).
124. TEX. R. Civ. P. 245.
125. Id. at 904; see TEX. PROB. CODE ANN. § 33(f)(1) (West 2003).
126. Jefferson State Bank v. Lenk, 323 S.W.3d 146 (Tex. 2010).
127. TEX. Bus. & COM. CODE ANN. § 4.406(c) (West 2002).
128. 323 S.W.3d 199 (Tex. App.-San Antonio 2009), rev'd, 323 S.W.3d 146 (Tex. 2010).
129. 323 S.W.3d 146, 150 (Tex. 2010).
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The supreme court held that in the context of deceased customers, "(1) a
bank satisfies its burden by retaining account statements for retrieval by
the estate administrator, and (2) the repose period begins to run once an
administrator is appointed. '' 130 Thus, since the real administratrix waited
until over two years after her appointment to demand the bank recredit
the account, her demand came too late and was barred.13 1 The supreme
court explained that after a customer's death, a bank cannot send state132
ments to the customer. Thus retaining the statements was appropriate.
Once a personal representative is appointed, the time period begins to
run as the personal representative now has the right to all the decedent's
133
business records and papers.
Accordingly, a personal representative must examine bank account
statements immediately after being appointed or risk the running of the
repose period which will bar recovery for unauthorized withdrawals from
the decedent's accounts. The repose period can run before the personal
representative obtains knowledge of the account. Thus, the personal representative must take prompt action to locate all the decedent's accounts.
The decedent's most recent income tax returns may be helpful in determining the existence of the accounts.
H.
CONTEMPT
According to In re Byrom, the ability to have a misbehaving executor
imprisoned for violating court orders is limited because of the constitutional prohibition against debtor imprisonment.13 4 In this case a creditor
presented the independent executor with unsecured claims based on previous probate court orders stating that the claims were to be paid from
estate funds within thirty days. When the creditor presented these claims,
the thirty days had already elapsed and the executor rejected both claims.
Two years later, the creditor filed suit to remove the executor. The trial
court removed the executor from office but did not discharge him. The
court also ordered the executor to pay the creditor's attorney fees and
expenses within thirty days and to deposit estate property into the registry of the court. The executor did not comply with these orders, so the
creditor filed a motion to enforce the orders by contempt. After hearing
evidence, the court remanded the executor to jail unless he made the required payments. Because the executor did not comply, he was confined
to jail. After posting bond, however, he was released from jail. He then
filed a writ of habeas corpus, which was denied, and was again sent to jail.
He filed for a writ of mandamus.
The Tyler Court of Appeals explained that "a person who willfully
disobeys a valid court order is guilty of contempt" and imprisonment is
130.
131.
132.
133.
134.
Id. at 149.
Id. at 150.
Id. at 149-50.
TEX. PROB. CODE ANN. § 37 (West 2003).
316 S.W.3d 787 (Tex. App.-Tyler 2010, orig. proceeding [mand. denied]).
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normally appropriate. 135 However, the Texas Constitution prohibits a
person from being imprisoned for a debt. 136 After a lengthy analysis of
contempt law, the court concluded that the executor was held in contempt for failing to deposit funds that would be used to pay debts, and
The court granted the
thus the contempt order was unconstitutional. 137
138
executor's petition for a writ of habeas corpus.
I.
ATTORNEY AD LITEM COSTS
In guardianship cases, the guardianship estate is responsible for the
costs of a guardian ad litem, 139 but In re Estate of Frederick140 demonstrates that in estate cases, the court may assess ad litem costs as it determines. After her son died and his wife attempted to probate his intestate
estate, the son's mother contested the application of the son's wife. The
court appointed an attorney ad litem for the unknown and unascertained
heirs. After litigation successfully showed that the wife was indeed the
son's wife, the court assessed the costs of the ad litem against the mother.
The Fort Worth Court of Appeals affirmed. 141 The court examined
Probate Code section 34A, which authorizes the court to appoint an attorney ad litem and noted that the "statute does not specify against whom
these costs must be assessed. ' 142 Thus, the assessment is within the
court's discretion. 143 Although an earlier case 144 and legislative history
suggest that the estate should be responsible for these costs, the court
noted that section 34A is clear and thus the text of the section is determinative. 145 Because the section is silent, Probate Code section 12(a) provides that the general rules of civil procedure apply, which state that costs
are generally assessed against the non-prevailing party unless the court
decides to assess them differently for good cause. 146 The court then held
that the trial court did not abuse its discretion by assessing costs against
the mother.1 47
IV. TRUSTS
A.
JURISDICTION
Carroll v. Carroll' 48 makes clear that except for the limited exceptions
135.
136.
137.
138.
139.
140.
141.
142.
143.
144.
pet.).
145.
146.
147.
148.
Id. at 791.
Tex. Const. art. I, § 18.
Byrom, 316 S.W.3d at 793.
Id. at 795.
TEX. PROB. CODE ANN. § 669 (West 2003).
311 S.W.3d 127 (Tex. App.-Fort Worth 2010, no pet.).
Id. at 128.
Id. at 129-30; see TEX. PROB. CODE ANN. § 34A (West 2003).
Frederick, 311 S.W.3d at 130.
Ajudani v. Walker, 232 S.W.3d 219, 224 (Tex. App.-Houston [1st Dist.] 2007, no
Frederick, 311 S.W.3d at 130-31.
TEX. R. Civ. P. 131, 141.
Frederick, 311 S.W.3d at 131.
304 S.W.3d 366 (Tex. 2010).
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in Trust Code section 115.001(d), district courts must hear cases involving
trusts. In this case, a beneficiary sued a trustee for breach of duty in
district court. The district court transferred the case to the county court
at law and issued an order removing the trustee from office, awarding
damages, and granting other relief. On appeal to the Texas Supreme
Court, the trustee raised the issue of the county court at law's jurisdiction
for the first time.
The supreme court agreed with the trustee that the county court at law
lacked jurisdiction and that its judgment was thus void. 149 The supreme
court explained that subject matter jurisdiction cannot be waived, and
thus it was permissible for the trustee to raise the issue late in the litigation. 150 For support the supreme court pointed to Trust Code section
115.001, which grants district courts exclusive jurisdiction over trust matters except for certain situations not relevant to this case. 151 The supreme
court examined the Government Code to see if any other ground existed
to permit a county court at law to have trust jurisdiction and found
none. 1 52 Accordingly, the county court at law's judgment was void and
3
the case was transferred back to the district court.15
B.
REMOVAL OF TRUSTEE
In Conte v. Ditta, a trial court removed a trustee from office, and the
trustee asserted that an earlier settlement agreement regarding the trustee's personal use of over $500,000 of trust funds was an election of remedies precluding or waiving the removal action. The Houston First Court
of Appeals in Conte v. Ditta154 disagreed, explaining that the settlement
remedied a past injury while the removal action was to prevent future
injury.
The trustee also alleged that the trial court abused its discretion in removing her from office, even though she used trust funds to pay her personal expenses, caused the trust to suffer material financial loss, and had
personal interests adverse to and in conflict with her duties as trustee.
After reviewing the evidence, the appellate court found there was sufficient evidence to support the trial court's findings and agreed that the
trial court did not abuse its discretion.1 55 The court noted that the breach
of trust was not cured merely because the trustee acknowledged she mis1 56
appropriated trust funds after being caught.
149. Carroll,304 S.W.3d at 368.
150. Id. at 367.
151. Id. at 367-68.
152. Id. at 368.
153. Id.
154. 312 S.W.3d 951 (Tex. App.-Houston [1st Dist.] 2010, no pet.). This is the remand
of Ditta v. Conte, 298 S.W.3d 187 (Tex. 2009), in which the Texas Supreme Court held that
"no statutory limitations period restricts a court's discretion to remove a trustee. A limitations period, while applicable to suits seeking damages for breach of fiduciary duty, has no
place in suits that seek removal rather than recovery." Id. at 188.
155. Conte, 312 S.W.3d at 958.
156. Id.
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SUCCESSOR TRUSTEE
C.
The Conte case also dealt with the appropriate method of filling the
vacancy after the trustee is removed. 157 After the trial court removed the
trustee from office, it appointed a successor trustee without following the
settlor's instructions for selecting a successor trustee. The Houston First
Court of Appeals held that the court exceeded its authority to deviate
from the terms of the trust under Trust Code section 112.054.158 Instead,
the court should follow the terms of the trust that authorized a majority
of adult beneficiaries to appoint a successor trustee. 159 A court exercising
its deviation power must do so in a manner that conforms as nearly as
possible to the settlor's intent. 160 Here, the settlor expressed his intent
when he provided instructions on the method of ascertaining a successor
trustee. The fact that one of the beneficiaries was the removed trustee
did not impact her rights as a beneficiary. Thus, a proper deviation would
from appointing anyone who was
have been to prevent the beneficiaries
16
previously removed as a trustee. '
D.
CRIMINAL LIABILITY
Prosecutors must have a good understanding of trust law or else162a
crooked trustee may escape justice, as demonstrated by Bowen v. State.
In this case, a jury convicted the trustee of misapplication of fiduciary
property valued at over $200,000 under Penal Code section 32.45. Trustee was then sentenced to eight years in prison, fined $10,000, and ordered to pay $350,000 in restitution.
The Eastland Court of Appeals agreed there was substantial evidence
that the trustee misapplied well over $200,000 of trust assets. 163 However, the indictment specifically stated that these trust assets were owned
by one named beneficiary or held for her benefit; it did not list all the
beneficiaries. Because only about $100,000 was held in trust for the
named beneficiary and the jury charge did not include a lesser offense,
the trustee's conviction was reversed. 164
V.
CONCLUSION
The cases discussed in this article address a wide array of issues, some
very narrow and some with potentially broad impact. This article has already discussed the practical application of many of the cases, however, it
is also important to understand some overarching principles that tran157. Id. at 959-60.
158. Id. at 960.
159. TEX. PROP. CODE
160. Id. § 112.054(b).
ANN.
§ 113.083 (West 2007).
161. Conte, 312 S.W.3d at 960-61.
162. 322 S.W.3d 435 (Tex. App.-Eastland 2010, pet. granted).
163. Id. at 441.
164. Id. at 442-43.
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scend individual cases and form a pattern. Here are some examples of
patterns this author detected:
" The Texas Supreme Court has shown an increased interest in cases
relating to estate planning,165as evidenced by three significant cases
during the Survey period.
litigants who wait too long to assert
" Courts are apt to "punish"
166
estate-based claims.
" Courts strictly enforce
the concept that testamentary intent must
167
be clearly stated.
" Courts are willing 16to8 "forgive" conduct that has at least a quasireasonable excuse.
" Litigants who conducted themselves in outrageous manners will
nonetheless try to find
some way to escape liability 169 and are
170
sometimes successful.
165. See, e.g., Frost National Bank v. Fernandez, 315 S.W.3d 494 (Tex. 2010); Jefferson
State Bank v. Lenk, 323 S.W.3d 146 (Tex. 2010); Carroll v. Carroll, 304 S.W.3d 366 (Tex.
2010).
166. See, e.g., Frost National Bank v. Fernandez, 315 S.W.3d 494 (Tex. 2010); In re Estate of Rogers, 322 S.W.3d 361 (Tex. App.-El Paso 2010, no pet.); In re Estate of Rothrock, 312 S.W.3d 271 (Tex. App.-Tyler 2010, no pet.); Jefferson State Bank v. Lenk, 323
S.W.3d 146 (Tex. 2010).
167. See, e.g., In re Estate of Allen, 301 S.W.3d 923 (Tex. App.-Tyler 2009, pet. denied); In re Estate of Hendler, 316 S.W.3d 703 (Tex. App.-Dallas 2010, no pet.).
168. See, e.g., In re Estate of Catlin, 311 S.W.3d 697 (Tex. App.-Amarillo 2010, pet.
denied); In re Estate of Gay, 309 S.W.3d 676 (Tex. App.-Houston [14th Dist.] 2010, no
pet.).
169. See, e.g., In re Estate of Russell, 311 S.W.3d 528 (Tex. App.-El Paso 2009, no
pet.); In re Estate of Hoelzer, 310 S.W.3d 899 (Tex. App.-Beaumont 2010, pet. denied);
Conte v. Ditta, 312 S.W.3d 951 (Tex. App.-Houston [1st Dist.] 2010, no pet.); Bowen v.
State, 322 S.W.3d 435 (Tex. App.-Eastland 2010, pet. granted).
170. See Bowen v. State, 322 S.W.3d 435 (Tex. App.-Eastland 2010, pet. granted).
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